The Moore Corporation had an operating income (EBIT) of $950,000. The company's depreciation expense is $285,000. Moore's 100% equity financed, and it faces a 35 percent tax rate. What are the net income and the net cash flows?

The Moore Corporation had an operating income (EBIT) of $950,000. The company's depreciation expense is $285,000. Moore's 100% equity financed, and it faces a 35 percent tax rate. What are the net income and the net cash flows?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 10P: The Moore Corporation has operating income (EBIT) of 750,000. The companys depreciation expense is...

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Question

What are the net income and the net cash flow ?

The Moore Corporation had an operating
income (EBIT) of $950,000. The company's
depreciation expense is $285,000. Moore's 100%
equity financed, and it faces a 35 percent tax
rate.
What are the net income and the net cash
flows?

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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